Retirement Road Getting Longer And Longer

Just when it looked like the baby boomers would be riding off into the sunset, 401k's and other investments tucked securely in pockets to sustain them through retirement, along comes a "once in a century" financial meltdown and jeopardizes an entire generation's post-working life prosperity.

As a result, many would-be and current retirees are being forced to re-examine their expectations for their twilight years, and to adjust one of two things—the trajectory of their career, or their expected income. And the decisions they make could have serious ramifications right throughout the job market, with the most immediate of those coming nearer the top of it.

It's no secret that seniority and experience can be found in abundance in the upper echelons of most companies in most businesses, across most business sectors. With the average age for retirement in the U.S. resting at around 63 at the moment, the average person retiring is doing so with some 40 years of professional experience and accumulated knowledge under their belts. In a culture where knowledge is a valued commodity, and experience stands as a key issue in the presidential election, it stands to reason that those possessing both will rest somewhere near the top of the professional food chain—in the C-suites and executive washrooms, so to speak.

Gumming up the works Until now, retirement has served as a form of natural attrition in the job market, leading to regular turnover as those who have spent their lives climbing the corporate ladder step off it to enjoy a well-earned retirement. Some, obviously, are able to do it earlier than others, but, equally obviously, whenever someone does leave the working world, they inevitably leave behind a gap that has to be filled. More and more reports of falling house prices and 401k's losing value has in turn led to more and more reports of people looking to stay in the workforce longer, and even to re-enter it in order to safeguard that nest egg for later, more fiscally stable years.

Along with those dreams of a long and carefree retirement, so the natural attrition rate goes out of the proverbial window, and something that looks suspiciously like stasis sets in. With those approaching that magic 63 now looking to hang on until 70 before exiting the workforce, what's already shaping up to be a tough job market will get squeezed ever more, and upward career progression will become that much harder—at least in the medium-term. Lack of liquidity isn't just gumming up the credit markets, but the job markets as well.

Staying the course, even if it means taking the long way round Longer term predictions are always harder to make, but the thought does occur that this crisis—should it continue for any length of time—may fundamentally alter perceptions of retirement. If those earning top salaries are seeking to stay in the workforce until age 70 to safeguard their future, then what of those seeking to follow them? Again, it stands to reason that if it's taking the baby boomers an extra seven years to retire, the following generation will take an extra seven years to get into those top positions. Maybe 70, or 68, will end up as the new 63. While that's obviously a fairly simplistic take on the situation—the markets may correct enough to allow the following generation to retire even earlier, for example—it's not only those looking to retire imminently that should be reassessing their career trajectories at the moment.

Even established professionals as far as 15 years out from retirement would do well to look at the current situation and consider how it may affect them—and their careers—in the next few years. Recognizing that it may take longer to get to a career pinnacle or top job is a key factor, as is being prepared to consider switching industries, or career paths, in order to take advantage of opportunities wherever they may arise. While being diversified and willing to stay the course are key pieces of advice that people will have been hearing from financial advisers of late, they’re equally important from a career standpoint.

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Phil Stott is a staff writer at Vault.com. Originally from Scotland, he now lives in New York, and has also lived and worked in Japan, South Korea and Eastern Europe.